Here's What Exxon 'Lost' From Russia Sanctions

Western sanctions against Russia are costing America's most powerful company a few hundred million bucks. A billion to be exact.

Exxon Mobil said in a 10-k filing with the SEC on Wednesday that it lost a maximum of $1 billion from sanctions. In July 2014, the European Union and United States imposed sanctions on the Russian energy sector. The West believes Russia is behind much of the civil unrest in eastern Ukraine. Sanctions began in March 2014 following Russia's annexation of Crimea, a Black Sea peninsula that was once part of Ukraine. But the punishment was kicked up a notch in July with sanctions banning American companies from doing business with Russian oil and gas drillers. That hurt a new $723 million joint venture between Exxon and
Rosneft, Russia's largest state owned oil company. This year, the two companies were to start drilling for oil in the Kara Sea, located in the Arctic Circle in northern Russia.

"In compliance with the sanctions and all general and specific licenses, prohibited activities involving offshore Russia in the Black Sea, Arctic regions, and onshore western Siberia have been wound down," the company said in its filing for 2014 activities. Exxon said its "maximum exposure" to loss from these joint ventures was $1 billion.

A spokesman from the company said that the figure represented "potential and not actual" losses.

Exxon has a lot of money invested in Russian oil and gas.

It is also one of the largest stakeholders in the massive offshore Berkut platform on Sakhalin Island in Russia's far east. They own 30% of the the Sakhalin oil fields through a local subsidiary called Exxon Naftegas Limited. The other partners are oil firms from Japan, India and Russia's Rosneft, which has a 20% stake. The global partnership, called the Sakhalin Consortium, was formed back in 1996 to explore for hydrocarbons in Russian sub-Arctic waters. Despite sanctions, Sakhalin began production this year.

Exxon is unable to collect revenues from the facility so long as sanctions are in place or risk hefty fines from Washington.

Rosneft CEO, Igor Sechin, known by the local media as "Darth Vader", said in September that Sakhalin Island and Kara Sea production will continue without Exxon. Rosneft and Exxon launched a new Kara Sea drilling well in September, but the American oil company will have to stand-down for now.